By WILLIAM JIMOH

ASSET Management Corporation of Nigeria (AMCON) established on July 19, 2010, following the signing of the AMCON Act into Law by President of the Federal Republic of Nigeria, was created to be a key stabilising and re-vitalising tool to revive the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy.

The Central Bank of Nigeria (CBN) and the banks in 2011 signed a Memorandum of Understanding (MoU) for the establishment of a sinking fund, to which banks are expected to contribute to.

This is part of efforts to assist AMCON meet its goals and also ensure that government will not bear the cost of financial crisis in future.
In 2013 alone, eight deposit money banks contributed N53.52 billion to AMCON Banking Sector Resolution Cost Fund.
Speaking with Vanguard Investors’ Forum, some shareholders expressed dissatisfaction with the hike in the percentage contributed by banks, while others see it as good development, which will better place AMCON in the right position to attain its goals and objectives. Excerpts:  

MRS. Bisi Bakare, National Coordinator, Pragmatic Shareholders Association of Nigeria:

We have nothing against AMCON charging the banks 0.3 percent of their turnover, but in a situation whereby it is increased to 0.5 percent, minority shareholders have to kick against it, which is the reason why we have been asking why it should be this percentage.

Apart for this, when AMCON took over the three banks, we were told that irrespective of the amount they put in the banks, they will not put any of their staff as members of the Board of Directors of the banks.

But, unfortunately, what we are seeing today is contrary to that.

At Union Bank, they have a representative just as in some other banks where they are being represented. This we consider very wrong since they already charge the banks for rescuing them.

Another concern we have as shareholders is, how long the banks will continue to pay AMCON and will they ever reduce the charges?

Mr. Peter Owolabi, National Coordinator, Integrated Supreme Shareholders Association of Nigeria:

My view is that AMCON has saved us as investors. This is because if not for the intervention of AMCON, what we have today is not what will be the case. Many banks which should have gone under have remained in operation today because of that crucial AMCON’s intervention.

The manner with which these banks gave out loans to people without due investigation of worth of assets to be used as guarantee for collecting loans was responsible for their anguish.

Rescue by AMCON

In many cases, they gave money to people more than the worth of what they used as standing assets, and at the end of the day, they had their fingers burnt when these people failed to pay.

It was while they were in the midst of this that AMCON came to their rescue.

The question to ask whosoever that is saying the money being remitted to AMCON by the bank is too much is; why did they not rise to the rescue of the banks when they were in trouble. If AMCON had rescued them using its own money, is there anything wrong with collecting the money back?

This also applies to banks’ operations. When they give you money, they take it back with interest. So, AMCON should in whichever way it deems fit get its money back. If the percent which used to be 0.3 of the banks’ turnover was increased to 0.5 percent, we cannot blame them and there is nothing we can do about that.

Chief Robert Igwe, Former General Secretary of the Nigerian Shareholders Solidarity Association

It was not because the managers of these banks were not working to meet the demand of the central bank that they were nationalised, but because the people at the CBN used that policy to corner the banks.

I can remember that in the case of Afribank, Springbank and BankPHB,the managers were running around to gather the money they needed to meet up with the recapitalisation, but because they were not given enough time to do that, they failed.

AMCON which is an agency of government should not have taken such decision without prior knowledge of the investors. We would have put heads together to make sure that they were not taken over by AMCON.

And now that AMCON has invested by a way of rescuing those banks, it is not absolutely bad, but they have to ensure that the deduction is in a gradual process.

0.5 percent is too much.

They should have made it 0.1 because it seems like the banks are not making as much profit as AMCON thought.

If it is reduced to 0.1 percent, I believe in the next five to 10 years at most, they would have gotten their money back.